Aurelia Butler

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.The boss of Mercedes-Benz has called on Brussels to lower tariffs on electric cars imported from China, just as the European Commission is considering raising import duties amid a probe into Beijing’s subsidies for its car industry.Increased competition from China would help Europe’s carmakers produce better cars in the long run, said chief executive Ola Källenius, adding that protectionism was “going the wrong way”.“Don’t raise tariffs. I’m a contrarian, I think go the other way around: take the tariffs that we have and reduce them,” he told the Financial Times.Chinese companies looking to export to Europe was a “natural progression of competition and it needs to be met with better product, better technology, more agility”, he added. “That is the market economy. Let competition play out.”The commission is investigating whether Chinese carmakers are receiving subsidies from Beijing enabling them to lower prices on vehicles exported to Europe, undercutting the region’s own manufacturers.French carmakers such as Stellantis and Renault, which do not have large businesses in China, have been vocal about the threat of Chinese electric vehicles. However, the probe has faced a backlash from German carmakers that are reliant on China for a significant portion of their sales and profits.German executives fear potential retaliation from Beijing and Chinese consumers at a time when local brands such as BYD have already been grabbing market share from western incumbents in the world’s largest EV market.More than one in three Mercedes-Benz cars are sold in China, while the country accounted for 40 per cent of Volkswagen’s car sales last year.Chinese carmakers Geely and SAIC, which is controlled by the Chinese state, own a fifth of shares in Mercedes-Benz.“We did not ask for this [probe],” said Källenius. “We as companies are not asking for protection, and I believe the best Chinese companies are not asking for protection. They want to compete in the world like everybody else.”Offering a full-throated defence of open markets, he said: “It has been opening up markets that has led to wealth growth, especially in the economic wonder of China, that has lifted hundreds of millions of people out of poverty.“If we believe protectionism is the thing that gives us long-term success, I believe history tells us that is not the case.”At present, Chinese EVs are subject to a 10 per cent tariff when imported to Europe. European carmakers pay 15 per cent when exporting to China, which is part of the reason most German models sold in China are made in the country.Källenius said there needed to be a “level playing field” and that both sides should be “mindful about building economic win-win situations”.He added: “We live in a pragmatic world and realise there are some expectations to the general market economy rule . . . but if we seek our fortune in increased protectionism, we are going the wrong way.”Stellantis and Renault have had a rougher ride in China than their German rivals, with the French government actively seeking measures against the Chinese companies. Stellantis’ chief executive Carlos Tavares last year warned that the bloc’s car industry, which employs roughly 13mn Europeans, was at risk of being wiped out by Chinese competition, much like the continent’s once-vibrant solar panel industry.VW’s Porsche, which imports all of its cars sold in China, last year vowed to fight potential new EU tariffs on Chinese carmakers. Its strategy is rare with most foreign carmakers including VW, having largely shifted to local production for the Chinese market. More

Western governments wanting to curb greenhouse gas emissions are encouraging greater use of electric vehicles to help achieve their aim. But it is also becoming clear that offering support involves solving dilemmas. Two of the most pressing are: how to balance domestic political concerns with geopolitical tensions; and how to encourage citizens to buy electric vehicles without undermining key national manufacturing industries.In the US, the Biden administration set out three years ago that EVs should comprise half the number of vehicles being sold in the US by 2030. In Europe, the EU aims to have at least 30mn zero-emission vehicles on its roads, also by 2030. Such targets are likely to spur innovation and generate employment, but achieving the prime aim — EVs replacing petrol vehicles — has been slower than anticipated, and they are nowhere near mainstream. Test yourselfThis is the second in a new series of monthly business-school style teaching case studies devoted to responsible-business dilemmas faced by organisations. Read the piece and FT articles suggested at the end before considering the questions raised.About the author: Christopher Tang is a UCLA distinguished professor and the faculty director of the Center for Global Management at the UCLA Anderson School of Management.The series forms part of a wide-ranging collection of FT ‘instant teaching case studies’ that explore business challenges.Even those western users that are not persistently reluctant to give up the internal combustion engine hit the twin problems of limited availability and non-affordability of domestically made electric vehicles. China’s BYD, on the other hand, has made inroads in Europe with more affordable versions of electric vehicles.  The question for US and European governments is: what steps can they, or should they, take to protect their automakers, which are so important to their wider economies?Subsidies One tactic is to use subsidies to make electric vehicles more affordable to buyers, especially at a time of rising inflation.Germany chose to offer a €6,750 (reduced from €9,000 in 2022) tax incentive for pure battery-electric vehicles and €6,750 for plug-in hybrids. The US Inflation Reduction Act (IRA) in 2022 brought in an electric vehicle tax credit of up to $7,500 — but this is subject to increasing strictures on where battery components and critical minerals are sourced.  These subsidies have helped boost sales. In the US, nearly 1.2mn electric vehicles were sold in 2023, representing 7.6 per cent of total sales in 2023, up from 5.9 per cent in 2022. In the EU, sales of pure battery electric vehicles similarly passed 2mn, up from 1.6mn. However, the rules on subsidies can become complex to the point where buyers may be put off. In April 2023, the US Treasury announced that certain foreign-brand electric vehicles assembled in the US — Audi, BMW, Hyundai, Nissan, Rivian, Volkswagen and Volvo — would no longer qualify for even partial tax credits. To reach the full incentive requires at least 40 per cent of the battery critical minerals to be extracted or processed within the US or in countries with which it maintains a free trade agreement, such as Mexico or Canada, and / or to come from materials recycled in North America. In December 2023, the US Treasury additionally announced that, from 2024, no US-manufactured electric vehicles that include Chinese-made battery components would be eligible for the full subsidies offered by the IRA. Tariffs Some governments have used import tariffs to shield domestic electric-vehicle manufacturers. The US imposes a 27.5 per cent import duty, while the UK and EU levy a 10 per cent duty on foreign-made cars. The EU’s more open trade policy has empowered European automakers to produce electric vehicles in China, export them to Europe and offer them at competitive prices. For example, although MG Motor is headquartered in the UK and owned by China’s SAIC, its MG5 and MG ZS are made in China and exported.Nevertheless, in September, the European Commission, the EU’s executive arm, announced an anti-subsidy probe into Chinese electric vehicles that may be “distorting” the EU market, and said it will consider raising import tariffs to prevent an influx of cheaper Chinese models that could harm local manufacturers. China’s BYD, for example, surpassed Tesla as the world’s top-selling maker of fully electric cars at the end of 2023. BYD reported sales of 526,000 battery-only vehicles for the fourth quarter, while Tesla delivered 484,000 cars.But while higher import tariffs could help protect against Chinese electric vehicle exports, they would also slow down EV adoption in the EU. It would be very difficult for European manufacturers to produce the tens of millions of electric vehicles required to meet the EU’s 2030 target solely from domestic plants. Their challenges would include China’s three-quarters share of global battery cell production capacity and its dominant position in supply chains for critical raw materials, such as cobalt and lithium. Even within the EU, France and Germany disagree on tariffs on electric vehicles. France supports a protectionist curb on imports from China, while Germany worries about potential retaliation from China that would hurt its own exports. In the US, efforts to safeguard domestic manufacturers also face increasingly complex challenges. There is pressure on costs, for instance. To settle the United Auto Workers’ strike in November last year, GM, Ford and Stellantis (formed by the merger of Fiat Chrysler and PSA in 2021) have agreed to offer a pay rise to UAW workers of 25 per cent over the next four years. The resulting substantial pay rises and the extension of union protection to plants making electric vehicle batteries are likely to drive up prices.Moreover, GM and Ford have been concentrating on making bigger and higher-priced electric SUVs and pick-up trucks, but sales for those have been relatively sluggish. In October, GM announced a one-year delay in expanding production for all-electric trucks at its Orion Assembly plant in Michigan.The tax credits are both complex and yet shrinking, while tariffs need fine calibration. For those reasons, both tactics create challenges for the EU and the US policymakers trying to bring accessible, affordable electric vehicles into the mainstream.  Questions for discussion Read: EU plans anti-subsidy probe into Chinese steelmakers and Ford chair warns extended strike will boost Tesla, Toyota and ChinaConsider these questions: Should the US extend eligibility for tax credits to all electric vehicles (EVs) assembled within the US? Should the EU consider raising tariffs on EVs to deter imports from Chinese producers?  How would increased import tariffs on EVs affect the green transition and green innovation in the EU? Should US automakers shift further towards making smaller and more affordable EVs? More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.The United Steelworkers union will on Tuesday ask President Joe Biden to open a trade investigation into alleged Chinese unfair economic practices in the shipbuilding and maritime logistics sectors.The USW and other unions will file a petition with the US Trade Representative outlining alleged discriminatory practices that have helped China dominate global shipbuilding, according to people familiar with the move.The petition will be made under Section 301 of the Trade Act of 1974 — the same statute that former president Donald Trump used to justify the imposition of tariffs on Chinese imports when he launched a trade war with Beijing in 2018.The administration will have 45 days to decide whether to respond by opening an investigation. The USTR is already conducting a review of the Trump-era tariffs to determine if and how they should be restructured.The White House and USTR did not comment.“The United States was once a leader in the commercial shipbuilding industry, but over the past two decades, the Chinese Communist party enacted a comprehensive strategy to dominate the full spectrum of global trade, making massive investments in shipbuilding and engaging in predatory trade practices,” said USW president David McCall. The union had been “proud” to work with the Biden administration on growing domestic supply chains again, he added, and was now seeking “to build on this momentum by reviving our commercial shipbuilding industry, both ensuring a steady supply of needed goods and creating good, community-sustaining jobs”.The American steel industry has become a political issue in the 2024 presidential election after Nippon Steel last year launched a $14.9bn takeover of US Steel, headquartered in Pittsburgh, a city in the critical swing state of Pennsylvania. The USW, which is based in Pittsburgh, also opposes the Nippon Steel deal.Experts said Biden would be unlikely to turn down the request for a 301 probe. Trump, the presumptive Republican presidential nominee, would almost certainly criticise him for not taking up the petition.“For a Democratic, pro-labour president in an election year, this is a no-brainer,” said Evan Medeiros, a Georgetown University China expert and author of a recent report on US-China relations. “The broader challenge is that we are now in an era of US-China ties where domestic politics in both countries is as influential, if not more so, than geopolitics in shaping relations.”China is likely to become an increasingly political issue as the US election draws near. Biden last week said he would sign legislation to force ByteDance, the Chinese owner of video-sharing platform TikTok, to divest the app if lawmakers approve a bill expected to be up for a vote in the House on Wednesday.Any move to open an investigation will potentially create more tension in US-China relations, threatening the stabilisation that has occurred since Biden met his counterpart Xi Jinping in November. But Biden officials have stressed that the US would continue to take security measures and last week the president ordered an investigation into whether Chinese smart cars pose a national security threat to Americans.The USW petition will claim that Chinese shipbuilders have benefited from protectionist government policies, including preferential financing ranging from state-run bank loans to tax breaks. Over the past two decades, China has gone from producing roughly 12 per cent of global commercial ships by tonnage to more than 50 per cent in 2023, according to Clarksons Research, a maritime consultancy.One person familiar with the case said USW would propose relief measures including the imposition of port fees on Chinese-built vessels to create a fund to help revitalise US shipbuilding.The push comes after Congress provided $52bn to help rebuild the US domestic chip industry and as Biden has shown a willingness to pursue industrial policy through legislation such as the Inflation Reduction Act.The petition will also raise concerns about Logink, a Chinese software platform that provides data on global supply chain logistics, which critics say poses a national security risk to the US.“Ninety per cent of US military cargo travels by commercial vessels and the CCP would know the location of and destination of those goods,” said the person familiar with the case. “Logink is part of the CCP’s overall strategy for national dominance and power.”The US transportation department recently said China was pushing data standards that facilitate Logink’s use in critical port infrastructure and very likely provided Beijing the ability to access or collect “sensitive logistics data”. Logink did not immediately respond to a request for comment. Additional reporting by Joe Leahy in Beijing More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Samsung and SK Hynix, the world’s leading memory chipmakers, have stopped selling used chipmaking equipment for fear of falling foul of US export controls on China and western sanctions on Russia.The South Korean companies have been storing used machines in warehouses instead of putting them on the secondary market, three traders of second-hand chipmaking tools told the Financial Times.“We are worried it [the equipment] could fall into the wrong hands, and that this could cause problems in our relations with the US government,” said a person close to one chipmaker.Chipmakers started storing the old machines in 2022, after Washington imposed export controls to try to slow Chinese efforts to obtain high-performance semiconductors and advanced chipmaking equipment. “Some Chinese buyers have been selling tools on to Russia, so [the chipmakers] are scared of a backlash from the US side about that too,” said a second-hand tool trader based in South Korea.The US is pushing allies in Europe and Asia to tighten the restrictions, following the debut of an advanced chip by Chinese mobile phone maker Huawei and chipmaker Semiconductor Manufacturing International Corporation, despite both companies being on a US trade blacklist. Samsung and SK Hynix are large sources of second-hand equipment supply due to the rapid turnover of tools as memory chipmakers move swiftly from one generation of chip to the next.The South Korean semiconductor companies typically bundle used equipment into packages before selling them to dealers who put them up for sale at auctions. The biggest demand comes from China, where most chipmakers are focused on producing older generations of chips used in appliances and cars.Equipment that is no longer needed by the South Korean producers of cutting-edge chips for smartphones and artificial intelligence systems can be refurbished and reinstalled in Chinese facilities, usually for the production of less-advanced chips not covered by US controls, according to a Japan-based used equipment seller.However, the seller added that even 10-year-old second-hand machines, such as lithography equipment used to “print” transistors on logic and memory chips, could be deployed to make advanced chips once they had been repaired.The administration of President Joe Biden has been active in policing violations of US export controls on China and sanctions on Russia. In February, the Chinese commerce ministry issued a statement criticising sanctions imposed on 17 companies in Hong Kong and mainland China for alleged violations of Russia-related sanctions.According to a person familiar with the matter, SK Hynix recently started to sell some machines again after it started to run out of storage space. The person added that the company was still refraining from selling US-made equipment, which ranges from wafer grinders to etching machines. “South Korea knows that the equipment from Samsung or SK Hynix ends up in sanctioned Chinese fabs like [those of] SMIC or YMTC, it would not be good for the relationship between the US and South Korea,” said Gregory Allen, director of the Wadhwani Center for AI and Advanced Technologies. Samsung Electronics and SK Hynix both declined to comment. But a person familiar with the companies confirmed the stockpiling was related to US export controls on China and sanctions on Russia. Samsung and SK operate their own memory chip plants in China, which account for about half of their production capacity. They have both been granted indefinite waivers by the Biden administration that allow them to send US chipmaking tools to China to maintain and upgrade their Chinese facilities.The chipmakers are also holding on to their used equipment in China over concerns that they may need them if Washington tightens export controls further, forcing them to use less sophisticated tools.A senior manager at an SK Hynix factory in China said it was “well aware that permission to ship equipment to China can be withdrawn by the US”, making it reluctant to sell off second-hand stock. “They have a choice: to sell, to store, or to scrap,” said the Korea-based manager. “But we are talking about hundreds, if not thousands of machines together worth millions of dollars, so at the moment they are choosing to store.”Video: The race for semiconductor supremacy | FT Film More

SYDNEY (Reuters) -JPMorgan Chase CEO Jamie Dimon on Tuesday urged the Federal Reserve to wait until after June before cutting interest rates, arguing the central bank needs to shore up its inflation-fighting credibility. “I think they have to be data-dependent. If I were them, I would wait,” Dimon said at the Australian Financial Review business summit via a livestream from New York. “You can always cut it quickly and dramatically. Their credibility is a little bit at stake here. I would even wait past June and let it all sort it out.”Markets see an 84% probability the Fed will lower rates in June and have priced in 90 basis points of cuts for the year.Dimon said the U.S. economy was doing so well it could almost be characterised as a boom, but cautioned against the wholesale embrace of the soft landing narrative by markets. He put the odds of a recession of some sort at about 65% and refused to rule out the possibility of stagflation.Dimon said the surge in debt and equity markets since late 2023 had some bubble-like characteristics and linked it in part to the legacy of the pandemic-era fiscal and monetary stimulus, which was “still in the system, you can’t say that they’re gone”.Long a critic of bitcoin, Dimon said a lot of the practical uses for the cryptocurrency were illegal activity like sex trafficking, fraud and terrorism.”I don’t know what the bitcoin itself is for, but I defend your right to smoke a cigarette, I’ll defend your right to buy a bitcoin,” he said. “I won’t personally ever buy a bitcoin.”Dimon also weighed in on artificial intelligence and said JPMorgan had two thousand people working on 400 use cases for the technology at the bank. At home he uses AI to summarise books he does not have time to read.POLITICS IS A WORRYAs the U.S. gears up for a presidential election in eight months, Dimon said the campaign would be a “circus” and too close to call. He acknowledged fears that Trump’s second term could be more radical than the first and said he hoped the presidential hopeful’s foreign policy rhetoric would be more thoughtful.”The whole thing is going to be nervewracking,” he said. “I hope Trump is a much more thoughtful, rational speaker when he talks about foreign policy and how he wants to handle that.”Dimon has previously warned that geopolitical tensions, including the war in Ukraine and conflict in Gaza, could weigh on global growth, and reiterated that theme on Tuesday. More

Here are some highlights of the proposal:IMMIGRATIONThe proposal includes an increase in funding for immigration-related spending as polling shows voters concerned about U.S.-Mexico border crossings by undocumented migrants.The White House reiterated its unfulfilled request last year for $13.6 billion in emergency funds for border enforcement to pay for more Border Patrol agents, asylum officers and immigration court judge teams.DEFENSE Biden’s $895 billion national security budget calls for fewer stealthy F-35 fighter jets and Virginia-class submarines, first reported by Reuters, after a meager 1% increase allowed under caps agreed with Republicans last year left fewer than expected funds.Biden also renewed his demand for funding on border security, Israel, Ukraine, Taiwan and other national security issues that has been stalled by Republican congressional leadership for months.He wants to increase the special immigrant visas for Afghans by 20,000 and fund initiatives to support the safe use of artificial intelligence.HEALTHCAREThe Biden administration’s request for a 1.7% increase to $130.7 billion for the Department of Health and Human Services would facilitate extending health benefits he has secured for people aged 65 and older in the Medicare program to the general population, including those covered by Obamacare insurance or plans from their employer.Healthcare costs are seen as one of the key issues in November’s general election, and Biden’s budget proposes extending his wins in the Inflation Reduction Act: a $2,000 annual cap on out-of-pocket costs for all prescription drugs, a $35 monthly cap on out-of-pocket costs for insulin and capping drug price increases at inflation.Biden also wants Medicare to be able to negotiate the prices of more drugs and sooner after they hit the market and to expand the Medicaid program aimed for low-income people.He would vastly expand efforts to curtail ailments from cancer to Hepatitis C, increase access to HIV prophylaxis and spend money to prevent new bio-threats like the COVID-19 pandemic. He would also sharply increase funding to cut the country’s maternal mortality rate, the highest in the developed world.STUDENT LOANS AND HOUSINGWith concerns about costs a drag on his election campaign, Biden focused new budgetary efforts on cutting the cost of education and housing, two major expenses for many households.He would pump billions into funding the construction of new housing units and repairing existing public housing, hand out more housing vouchers, provide downpayment assistance, and give emergency assistance to people at risk of becoming homeless. A new, two-year tax credit would give $10,000 in mortgage relief.Biden would also provide free community college, 12 weeks of paid family leave, free preschool for four-year-olds, and fund a program to help retain public school teachers.CRIMEThe budget allocates $1.2 billion over five years in a new violent crime reduction and prevention fund to support law enforcement agencies, helping them hire new detectives to solve homicides, expand fentanyl seizures and hire prosecutors and forensic specialists.The funding is part of a package to boost efforts to combat crime as Republicans have worked to portray Democrats as aligned with a movement Biden has long denounced to “defund the police.” Crime is a regular election-year topic, although the latest data showed violent crime in the U.S. decreased an estimated 1.7% in 2022.Biden would also fund billions in new election security grants and wants to give $288 million to the Department of Justice’s antitrust division, a 28% increase over its 2023 funding.THE COST OF FOODThe Department of Agriculture budget requests $7.7 billion for the Women, Infants and Children nutrition program, up $1.4 billion from last year’s request, reflecting pressure on the program caused by higher participation and rising food costs.The budget also requests $6 billion for climate-related programs, including for hiring thousands of employees to implement Inflation Reduction Act programs, and a 20% increase to $365 million for agricultural research and education.AIR TRAFFIC CONTROLLERSBiden is seeking funding from Congress to hire another 2,000 air traffic controllers in the 2025 budget year after a series of near-miss incidents.A persistent shortage of controllers has delayed flights and, at many facilities, controllers are working mandatory overtime and six-day weeks to cover staffing shortages. The Federal Aviation Administration (FAA) wants $43 million to accelerate the hiring and training of controllers.Staffing issues forced the FAA to extend cuts to minimum flight requirements at congested New York City-area airports through October 2024 – allowing airlines to fly fewer flights without forfeiting take-off and landing slots.SPACEIn space, the White House sought $25.3 billion for NASA, a half-billion more than what the agency received for fiscal 2024 but contrasting with steeper increases the agency envisioned in years prior for its multibillion-dollar Artemis moon program.NASA chief Bill Nelson told reporters the agency will have to make some “hard choices” on science programs to cut as it prioritizes returning humans to the moon under Artemis in competition with China.Meanwhile, the White House sought $33.7 billion for defense-related space programs, including $29.4 billion for the U.S. Space Force. ECONOMIC FORECASTSWhite House forecasts showed increasing optimism that the U.S. economy is having a “soft landing,” reining in inflation without causing a recession. Biden said last week that he expected the Federal Reserve to begin cutting interest rates.The White House forecast 1.7% real GDP growth in 2024, and 1.8% in 2025, rising to 2.2% by 2030. Forecast consumer price inflation was 2.9% in 2024 and 2.3% in 2025.They also saw 4% unemployment, a figure that falls to 3.8% later in the decade, which they said matches full unemployment.The forecasts were set in November, and officials said the figures would be more optimistic if they were fixed today. More

WASHINGTON (Reuters) – U.S. President Joe Biden sketched his policy vision for a potential second four-year term on Monday, unveiling a $7.3 trillion election-year budget aimed at convincing skeptical Americans that he can run the economy better than Donald Trump.Biden wants to raise taxes by trillions on corporations and high earners, his budget wish-list showed, to help cut the deficit and pay for new programs assisting those who make less cope with high housing and childcare costs. Congress is unlikely to adopt the measures as proposed.Biden’s budget for the 2025 fiscal year, which starts this October, includes raising the corporate income tax rate to 28% from 21%, forcing those with wealth of $100 million to pay at least 25% of their income in taxes, and letting the government negotiate to bring more drug costs down.Meanwhile, the government would bring back a child tax credit for low- and middle-income earners, fund childcare programs, funnel $258 billion to building homes, provide 12 weeks of paid family leave for workers, and spend billions on law enforcement.”Do you really think the wealthy and big corporations need another $2 trillion tax breaks, because that’s what he (Trump) wants to do,” Biden said of Trump at an event in the competitive election state of New Hampshire. “I’m going to keep fighting like hell to make it fair.”Republican House of Representatives Speaker Mike Johnson quickly rejected the proposal, saying it reflected an “insatiable appetite for reckless spending” and a “disregard for fiscal responsibility.”The budget was released days after the Democratic president’s fiery State of the Union address, where he assailed the values of Trump, his expected Republican opponent in November’s election.Biden’s campaign has struggled to shake voters’ concerns about high prices and the U.S. economy’s direction. Forty percent of Americans think Trump would handle the economy best, compared with 31% who picked Biden and 28% who either didn’t know or refused to answer, according to a January Reuters/Ipsos poll.Trump, whose signature legislative accomplishment as president was a major 2017 tax cut, wants to sharply increase tariffs on imported foreign goods and cut regulations on energy producers.Democrats faulted the Trump tax cuts as widening the deficit and tilted to the wealthy but did not repeal them when they controlled Congress in 2021-2023. Key provisions expire next year, setting up a major showdown over tax policy.Biden’s proposed budget would raise tax receipts by $4.951 trillion over 10 years, including more than $2.7 trillion in tax hikes on businesses and nearly $2 trillion on wealthy individuals and estates, the U.S. Treasury said on Monday. A proposal to bring down deficit spending by $3 trillion over 10 years would slow but not halt the growth of the $34.5 trillion national debt. Deficits would total $1.8 trillion in the 2025 fiscal year, 6.1% of GDP, before falling to under 4% over a decade, the White House forecast.The Committee for a Responsible Federal Budget, a deficit-reduction advocacy group, called the proposal a “welcome start” but said it “doesn’t go nearly far enough.”The White House forecast 1.7% real GDP growth in 2024, and 1.8% in 2025, rising to 2.2% by 2030. Consumer price inflation for 2024 was forecast at 2.9% and 2.3% in 2025, with 4% unemployment, a figure that falls to 3.8% later in the decade.The forecasts were set in November, and officials said the figures would be more optimistic if they were fixed today.DEMOCRATIC MANIFESTOWhite House budgets are always something of a presidential wish list, but that is even more so in the current political climate.U.S. agencies are operating without a full-year 2024 budget, after hardline Republicans rejected an agreed-upon spending level. The U.S. government spends more than it takes in each year, and the majority goes to so-called mandatory programs and military programs, which lawmakers are unlikely to cut.A House Republican plan unveiled last week, which the White House immediately rejected, was aimed at balancing the federal budget within a decade by sharply cutting the scope of federal government and relying on optimistic, out-of-consensus growth forecasts.Last year’s standoff between Biden and hardline Republicans resulted in a two-year agreement to cap spending, the ouster of House Speaker Kevin McCarthy and the credit rating agency Fitch stripping the country of its AAA rating. More